Author Susan Feng, Liang Che
Original title: Russell Read: Cryptocurrency is a surprise to the global financial system, and the US election result is the best choice for the capital market
“Bi Tweet” interviewed Russell Read, managing partner of C Change Group and former chief investment officer of CalPERS and Gulf Investment, at the annual meeting of the National Chinese Finance Association (TCFA) this week. He said in the interview that cryptocurrency is a surprise to the global financial system. At the same time, he also believes that the result of the US general election is perfect for the capital market.
Today, the Dow rose 834.57, nearly 30,000 points. Pfizer announced the good news that the vaccine is 90% effective and Biden won the capital market carnival. Biden’s narrow victory in the general election, Georgia’s next January by-election will determine the ownership of the Senate, and the Democratic Party has also lost more than 10 seats in the House of Representatives, making it difficult for left-wing Democrats to implement extreme policies.
“This is simply the best result for the financial market,” Read said to “Beijing”. “A decentralized government is actually very beneficial to check and balance, which can avoid the introduction of extreme policies. In this case, the US market does not There will be huge ups and downs too.”
Since the beginning of this year, institutional investors from the Wall Street financial industry have begun to frequently get involved in the encryption field. Companies including MicroStrategy and Square have also invested in Bitcoin with great fanfare.
Read tells “Be Push”, “The role of cryptocurrency is linked to gold. Cryptocurrency has become a surprise in the global financial system. This is a very constructive role, especially in terms of very low interest rates and traditional currencies. The era of possible devaluation.”
He believes that the trillion-dollar fiscal stimulus measures in response to the covid-19 epidemic have raised questions about the value of the dollar, which has led to a substantial increase in the value of gold and bitcoin. Read emphasized to “Bitcoin” that “Bitcoin is a stored-value tool that can hedge against inflation.”
According to a report this month by “Beijing”, the Fed stated in the November Federal Open Market Committee statement that the benchmark interest rate will remain unchanged at the range of 0%-0.25%. The United States will maintain its easing stance of monetary policy and strive to make it within a period of time. The inflation rate is moderately higher than 2%, so that the average long-term inflation rate can reach 2%, while the long-term inflation expectation remains at 2%.
Regarding whether there will be inflation in the United States in the next few years, Read explained to “Beijing”, “Researching the history of the 20th century will find that inflation and deflation are balanced, and inflation is very common. Our problem now is, Is this temporary? I think there are risks here, not only currency risks, but also fixed income market risks.”
He said that interest rates in the fixed income market are currently very low, and “confidence in the bond market may be the key to stabilizing fiat currencies.”
Read also shared his views on the current development of the U.S. economy. According to economic data, the US economy grew at a record rate in the third quarter, 7.4% higher than the previous quarter, and an annual growth rate of 33.1%.
He believes that “one of the reasons for the 7.4% quarterly growth is that the US economy experienced the Great Recession in the previous quarter, and the US economy is a miracle in terms of transformation and adaptability. In other words, the US economy has experienced There have been countless shocks, and each time it changes in some way.”
However, Read also admits that some transformations are challenging and difficult. For example, the traditional source of employment growth and economic vitality in the United States is small businesses, but in the covid-19 crisis, large companies are doing very well while small companies are doing very badly.
He said, “Innovation comes from small companies, so this is a structural challenge for us, because traditionally one of the reasons why the United States is adaptable is because of the vitality of small companies.”
Although it looks like the US economy is recovering from the stock market, he admitted to “Betwee” that the real economy is not optimistic.
Read emphasized, “We found that as a society, Americans do not necessarily understand our disaster well. Whether it is a hurricane or something else, we need some time to adapt. In this sense, in terms of the covid-19 epidemic The response of enterprises is better than our policy response.”